Real GDP since the Trump tax reform in 2017 still lags the post-war rate by 27.5%

Today's third estimate for 2Q2025 real GDP came in 0.5 points hotter at 3.8% on increased consumer spending: 

Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting an upward revision to consumer spending. 

The big picture, however, indicates that the compound annual growth rate of real GDP from this report comes in at only 2.50% per annum for the eight years since 2Q2017. The corresponding figure for the sixty years 1947-2007 is 3.45% per annum. Economic growth since the year of the Trump Tax Reform late in 2017 therefore undershoots that post-war rate by 27.5%.

And measured from 2007 instead of 2017, real GDP growth has been even worse. Over the eighteen years since 2Q2007, real GDP has grown at a compound annual rate of just 1.97%, almost 43% worse than the pre-2007 rate of 3.45%.

Lower economic growth since the Great Financial Crisis remains the great unsolved economic problem of our time.

People who say "Just wait for the Trump tax cuts of 2025 to kick in" don't get it. There's nothing broadly, fundamentally, permanently different coming down the pike from that legislation. It's a continuation of the 2017 legislation, plus some temporary sweeteners.

A serious country would care about all this, but that would not be us. 

IMF: Global debt in 2024 was $251 trillion, 235% of global GDP

 

I keep hearing that gold is soaring because of continued dollar weakness lol

On the contrary, gold has risen despite continued dollar strength.

The enormous gains for gold in 2024 and 2025 are not explained by a round trip in the dollar index from 120 to 129 and back again. That's just a little side show in the bigger picture of dollar strength.

 

 

The dollar index has made steady progress out of the pit of despair at 85.46 in July 2011 under Barack Obama, the enemy of fossil fuels, to a place of relative strength today averaging above 120 in 2022 and 2023, 123 in 2024, and 125 in the first half of 2025.

Speaking of a weak dollar in this context is laughable.

Maybe the dollar is so strong again because the United States has become a net exporter of oil. The 1975 ban on oil exports was lifted in December 2015. Net imports of oil went negative for the first time since 1950 in 2020.

Gold is probably so strong in part because of increasing debt globally, which like rising prosperity helps drive demand for it as a hedge. Extreme poverty gripped half the world in 1950 but by 2020 it afflicts just 10%. Meanwhile gold production has nearly tripled over the period.

As a percentage of global GDP, global debt has gone from just above 100% of global GDP in 1980 to a whopping 235% of global GDP in 2024.

 

 

 

 

Biden killed off the Keystone XL pipeline, costing Alberta over $1 billion, construction workers over $2 billion, and the economy billion$ more, so Trump killing off wind is simply to be expected

 

Can you spot the GDP?

 

The real GDP report is out and it looks better than a month ago: +3.3% seasonally-adjusted annual rate for the second estimate for 2Q2025, instead of +3.0% in the first estimate.

But the big picture changes only microscopically. 

From the second quarter of 2017, the year when Trump's tax reform became law on December 22nd, until now real GDP has grown at a compound annual rate of 2.466%, instead of 2.456% last month. For the seventy years before that, the compound annual rate of growth was 3.182%.

Trump's so-called pro-growth tax reform falls short of the previous seventy years this month by 22.5% vs. by 22.8% last month.

Now made permanent as of the Fourth of July, or so they say, the Trump tax reform is likely to continue to, shall we say, weigh on things.

The problem remains the lingering after effects of the Great Recession, the Great Financial Crisis, the Housing Bubble, whatever you want to call it.

The Trump tax reform of 2017 didn't do anything to address that meaningfully, just as Obama never addressed it meaningfully, nor Biden.

The rupture with the past occasioned by 2008 is the elephant in the living room, and the Uniparty just pretends it isn't there. 

From 2Q2008 to 2Q2025, the compound annual rate of real GDP growth has been 1.995% vs. 1.990% last month, vs. 3.421% for the sixty-one years prior to that, starting in 2Q1947.

America is still 41.68% behind that this month vs. 41.8% behind that last month.

It's . . . depressing.

America still isn't booming

 

 The real GDP report is out and it looks pretty good at 3% for the first estimate for 2Q2025, especially in comparison with the -0.5% result for 1Q.

If only it were so.

From the second quarter of 2017, the year when Trump's tax reform became law on December 22nd, until now real GDP has grown at a compound annual rate of just 2.456%. For the seventy years before that, the compound annual rate of growth was 3.182%.

Trump's so-called pro-growth tax reform fell short by almost 23%. 

The problem remains the lingering after effects of the Great Recession, the Great Financial Crisis, the Housing Bubble, whatever you want to call it. The Trump tax reform of 2017 didn't really do anything to address it meaningfully, just as Obama didn't, and also Biden in his turn.

From 2Q2008 to 2Q2025, the compound annual rate of real GDP growth has been just 1.99% vs. 3.421% for the sixty-one years prior to that, starting in 2Q1947.

America remains 42% behind its old self.

That's why everyone is unhappy, but especially the young. They desperately feel the futility of the situation, encumbered as so many of them are with student loan debt for the degrees which are not translating into the key to the future. 

That's the sad reality of where we are, and where we are likely to stay for the foreseeable future.

But as always, the first step is admitting you have a problem instead of trying to put lipstick on that pig.

 

 

 

$30 billion is not jet fuel for the economy

 

‘Big beautiful bill’ may help some seniors on Social Security. But it doesn’t eliminate taxes on benefits 

... The new additional senior deduction and other changes in Trump’s “big beautiful bill” may reduce taxation of Social Security benefits by approximately $30 billion per year, estimates the Committee for a Responsible Federal Budget. ...               

$30 billion is 0.10 percent of current GDP of $29,962.00 billion.

House Speaker Mike Johnson wants you to know this is jet fuel for the economy. 

 

 

If it hasn't been jet fuel since 2017, it won't be now

Real GDP has been 2.43% compound annual 1Q2017 through 1Q2025. And that includes all the obscene pandemic spending.

This isn't even close to the 2.8% Trump cheerleaders are promising, let alone the 3% The Speaker touts.

 

Speaker Johnson: We've Given Everybody A Tax Cut, That Will Be Jet Fuel For The Economy

 

There's no new tax cut. The Trump tax reform from his first term simply continues. There's no injection of new money on a permanent basis involving tax bracket changes, nothing substantively different for the average taxpayer.

 

There are short-term gimmicks for seniors, earners of tip income, earners of overtime pay, car-buyers, etc., but most of these are scattershot and most importantly, most of them expire in 2028.

 

The incremental adjustments which occur naturally to standard deduction amounts would occur anyway. 

More above average income filers will be able to itemize than previously, but only until 2030.

 

 

 

CNBC also is wondering where the fuel comes from for future GDP under the Trump tax cuts since they are already not cutting it lol

 

What fools these people are! What fools they think we must be!

 

Trump's Tax Cuts Spurred Growth. BBB Will Do It Again

Hassett & Miran, USA Today

 

TRUMP'S TAX CUTS SPURRED NOTHING. 

 

AND NOTHING NEW HAS BEEN CUT NOW, JUST EXTENDED.

 

THERE IS NO NEW FUEL FOR ECONOMIC GROWTH. 

 

Real GDP since 1Q2017 has grown at a compound annual rate of 2.43%, 23% BELOW the post-war rate of 3.17% from 1Q1947.

 

The Trump tax cuts have been a failure. 

The consensus estimate for today's GDP report was indeed for -0.2, instead it surprised at -0.5

 

First-quarter gross domestic product (GDP) growth was revised lower Thursday in light of reduced consumer spending, surprising economists.

GDP contracted by 0.5 percent on an annualized basis, 0.3 percentage points lower than the last measurement from the Commerce Department.

Economists were expecting the number to stay the same at a 0.2 percent contraction. ...

More. 

Average yields at Treasury Note auctions this week have been significantly lower than at the immediately preceding auctions, indicating there has been a flight to safety on souring economic growth expectations.

Trump may get his lower interest rates . . . the hard way, lol. 

1Q2025 real GDP revised down 0.3 to -0.5 in third and final estimate on an increase in imports front-loaded into 1Q to avoid Trump's tariffs

 Real gross domestic product (GDP) decreased at an annual rate of 0.5 percent in the first quarter of 2025 (January, February, and March), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4 percent.

 

The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment and consumer spending.

 

Real GDP was revised down 0.3 percentage point from the second estimate, primarily reflecting downward revisions to consumer spending and exports that were partly offset by a downward revision to imports. ...

More.

Sounds like Howard Lutnick gobbledygook at the end there. Paragraph two speaks of an increase in imports. Paragraph three of a downward revision to imports. 

Which is it lol? 

Nominal 1Q2025 GDP clocks in at $29.962 trillion in the third estimate. SPX was at 5612 on Mar 31, yielding a crazy high stock market valuation of 187.  

TACO Trump is negative for long term investment, 1Q2025 exports were the worst on record for their positive contribution to GDP

Does anybody ever talk about exports anymore? You know, from domestic production? 

... In recent years, a cautious optimism had returned, as supply chain shocks from the pandemic pushed some companies to bring production back to the US. 

But frequent changes and uncertainty around where Trump's tariff policy is headed has 'got people spooked,' Andrew Anagnost, CEO of Autodesk, told the outlet.

The company sells software used by manufacturers to design factories and improve processes. 

'The current operating mode is just the death to long-term investment,' he said. 

While construction projects that were already underway are still going ahead, he added, confusion about the future is stalling new work. ...

More. 

Exports are a " + " when calculating GDP. Imports are a " - " when calculating it.

Exports' contribution to GDP in 1Q2025 is THE WORST ON RECORD.

No wonder GDP was negative. Outside the pandemic soaring imports had their worst negative impact on GDP on record in 1Q2025.

It's a terrible time to be introducing new huge taxes on imports needed by domestic manufacturers, but that's what Trump is doing. 

 

 

 

CNBC avoids the story like the plague: Real GDP for 1Q2025 was revised up to -0.2% from -0.3% in today's second estimate for 1Q

No one wants to talk about this. Crickets pretty much everywhere. CNBC had Rosie on to discuss, but there was no article.

 

Since 2007 nominal GDP has been growing at a compound annual rate nearly 40% worse than the rate which prevailed from 1947 to 2007

1Q1947-1Q2007: 7.01%

1Q2007-1Q2025: 4.23%

 

 

Nosebleed valuations continue despite recent stock market declines

 It's a long way down to normal.

The 2022 lows got us back only to the 2000 high, and people thought it was the end of the world when all it was was a good beginning lol.

 

Nominal GDP in 1Q2025 is estimated at $29.9776 trillion by the BEA this morning.

$SPX closed at 5611.85 on March 31, 2025.

That yields a ratio of 187 vs. the historical mean of 81, or 131% overvalued. 

Guru Focus gets similar results from the Buffett Indicator:

 

Real GDP shrank 0.3% in 1Q2025

Shrink, shrank, shrunk.

U.S. economy shrunk 0.3% in the first quarter as Trump policy uncertainty weighed on businesses

... fueled by an unexpected rise in imports as companies and consumers sought to get ahead of the Trump tariffs ...

Tomorrow is a big day for economic reports: Core pce inflation and 1Q2025 real GDP

 The consensus estimate for tomorrow's core pce inflation number is 2.6% year over year in March, and 0.1% month over month. In February the actual numbers were 2.8% year over year and 0.4% month over month.

The consensus estimate for tomorrow's real GDP estimate is 0.4% vs. 2.4% actual the previous quarter. Yes, you read that right, 0.4%. GDPNow's final read on 1Q2025 out this morning is  . . .  -2.7%.

Yikes.

The ADP employment change will also be reported. Consensus is for +108,000 vs. +155,000 actual the previous month.

Nonfarm payrolls comes out on Friday. Consensus is for +130,000 for April vs. +228,000 actual in March.

The Atlanta Fed's GDPNow model has been in the toilet since the end of February, latest snapshot for 1Q2025 is -2.5%

 The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.5 percent on April 24, down from -2.2 percent on April 17. 

More.

The BEA's first estimate of first quarter real GDP is scheduled for release on April 30th.

This number seems wei tu lo

 

IMF Warns Trump Could Cost the World a Trillion Dollars

The Guardian

 

Is that all?

 

World GDP in 2023 was $106.2 trillion according to the World Bank, whose graph shows that the 2009 Great Recession contraction was $3.34 trillion. The Grauniad is worried that the Trump trade war will cost a third of the 2009 contraction, based on an analysis by the IMF, "the most sober of global institutions" lol.

 

Meanwhile there was a 2015 contraction in global GDP which was much larger, $4.55 trillion. That was much worse than the so-called Great Recession. And much worse than the global impact of COVID in 2020, which was $2.39 trillion according to the World Bank's data.

 

Why isn't this popularly discussed?

 

AI laughably tells me "global GDP did not actually contract in 2015".

 

 

 

 

 

But the World Bank itself traces the 2015 global GDP hit to a massive contraction in trade, at the heart of which was the forced restructuring of the Chinese economy under Xi Jinping, who is a communist reactionary.

 

The sizes of the tariffs of Donald Trump, which far exceed those of the Smoot-Hawley era, especially with trade hegemon China, seem uniquely poised to wreak havoc on a world whose experts today can't draw the obvious parallel to the right year.